Arrowhead Pharmaceuticals (ARWR) has opened fiscal 2026 with Q1 revenue of US$264.0 million and basic EPS of US$0.22, supported by net income of US$30.8 million as the company continues to build on its move into profitability over the past year. Over recent quarters, revenue has shifted from US$2.5 million in Q1 2025 to US$542.7 million in Q2 2025, US$27.8 million in Q3 2025, US$256.5 million in Q4 2025, and now US$264.0 million in Q1 2026. EPS has moved from a loss of US$1.39 per share in Q1 2025 to US$2.78, a loss of US$1.26, a loss of US$0.17, and now a profit of US$0.22 per share. With trailing twelve month net income at US$202.3 million and basic EPS at US$1.48, the latest numbers point to firmer margins that set the stage for investors to judge how durable this profitability profile might be.

See our full analysis for Arrowhead Pharmaceuticals.

With the headline figures on the table, the next step is to see how these results line up against the prevailing stories around Arrowhead, including views on growth, profitability quality, and risk signals from the past year.

TTM net income tops US$200 million

• Over the last twelve months, Arrowhead reported total revenue of US$1.09b and net income of US$202.3 million, which works out to basic EPS of US$1.48 on a trailing basis.
• What stands out for a bullish view is that this trailing US$202.3 million profit follows prior twelve month periods where net income was around break even at US$1.6 million loss and then deeper losses of US$148.4 million to US$639.7 million. This suggests the recent move into profitability is being judged against a history of weaker results.
  • Supporters who focus on the company now being profitable can point to the shift from those earlier losses to positive EPS of US$1.48 as evidence that the earnings profile has changed over the last year.
  • At the same time, the modest earnings growth forecast of about 4.35% a year means the bullish case leans more on the quality of this profit and the earnings inflection than on rapid growth.

P/E of 44.7x versus peers at 9.1x

• Arrowhead is trading on a trailing P/E of 44.7x compared with a peer average of 9.1x and a US Biotechs industry average of 19.7x, so the shares are on a much higher earnings multiple than both groups.
• Bears point to this premium multiple as a key concern, and the gap in P/E ratios gives them concrete numbers to work with.
  • Critics highlight that even after turning profitable, earnings are only forecast to grow about 4.35% a year, which can look modest when the stock is priced at more than 4x the peer P/E.
  • On top of that, the recent three month share price volatility and significant insider selling over the past quarter can reinforce the bearish view that the current valuation leaves limited room for disappointment.

If you are weighing that premium P/E against the recent swing into profit, it helps to see how different investors frame the trade off in their narratives: Curious how numbers become stories that shape markets? Explore Community Narratives

DCF fair value sits at about US$144.20

• The shares trade at US$64.52 while the provided DCF fair value figure is US$144.20, which implies the stock is cited as around 55.3% below that modeled cash flow estimate.
• Supporters of a more optimistic stance point to this gap between price and DCF fair value as a counterweight to the high P/E, and the earnings history adds nuance here.
  • On one hand, the trailing US$202.3 million net income and EPS of US$1.48 give some backing to a case that the business can support a higher valuation than loss making periods would have suggested.
  • On the other hand, the relatively modest 3.2% annual revenue growth forecast and 4.35% earnings growth forecast mean investors still need to judge whether that DCF fair value is realistic for a company that has only recently moved into consistent profitability.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Arrowhead Pharmaceuticals's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

Arrowhead combines a high 44.7x P/E and modestly cited growth forecasts with recent earnings volatility, so some investors may view its risk reward balance as uneven.

If that combination of rich pricing and choppy results makes you hesitant, you might want to explore 86 resilient stocks with low risk scores that focus on more resilient profiles with lower risk scores.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.